Half-year figures from stockbroker and investment manager Charles Stanley (CAY) were not as bad as the headline figures suggest. Total revenue from fees and commission was barely changed at £59.7m and, after adding back one-off costs, amortisation charges and a £1.4m levy from the Financial Services Compensation Scheme, adjusted pre-tax profits were down a more manageable £1.2m at £5.6m.
In the past 12 months, funds under management have increased by 13.9 per cent to £15.6bn, and within this there was a 22.7 per cent rise in funds held under discretionary management to £5.4bn - that's important because discretionary funds generate higher fees than advisory funds. Accordingly, in the core private client division, fee income rose from £26.1m to £28.8m, although the tough trading climate kept a lot of investors away from the market, hitting transaction volumes and shaving commission income by £4m to £20.6m.
However, there was better news on the financial services side, which includes employee benefits and pension administration services. Revenue there rose by 10.3 per cent to a record £6.4m, thanks to an increase in funds under management from £151m to £165m since the end of March.
Broker Peel Hunt is forecasting full-year EPS of 15.6p, rising to 21.5p the year after (19.7p in 2012).
CHARLES STANLEY (CAY) | ||||
---|---|---|---|---|
ORD PRICE: | 292p | MARKET VALUE: | £132m | |
TOUCH: | 289-295p | 12-MONTH HIGH: | 299p | LOW: 245p |
DIVIDEND YIELD: | 3.9% | PE RATIO: | 27 | |
NET ASSET VALUE: | 175p* | NET CASH: | £34.8m |
Half-year to 30 Sep | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|
2011 | 5.15 | 8.49 | 2.75 |
2012 | 3.40 | 6.00 | 2.75 |
% change | -34 | -29 | - |
Ex-div: 14 Nov Payment: 14 Dec *Includes intangible assets of £33.9m, or 75p a share |